The Bipartisan Infrastructure Law (BIL) and Inflation Reduction Act (IRA) present an unprecedented opportunity to grow efficiency and electrification across the United States. They also represent an extraordinary amount of work and coordination for our state energy offices, regulators, energy efficiency businesses, and other stakeholders. To take advantage of the full funding available, states should consider both national- and regional-level ways to coordinate funding and programs.
Regional coordination has long been a cornerstone of national energy efficiency policy. Recognizing that each region is unique in its goals and market characteristics, the U.S. Department of Energy (U.S. DOE) created REEOs or Regional Energy Efficiency Organizations. REEOs have created partnerships, acted as conveners, and enabled regional market transformation. IRA and BIL implementation should be a time to lean on these organizations once again, using regional coordination to achieve state, local, and national goals. Below are five key areas where NEEP thinks regional coordination on energy efficiency and building decarbonization policy can ensure success in IRA and BIL implementation and beyond.
1. Coordinating on Workforce Training, Tools, and Equipment Training
States in the Northeast and Mid-Atlantic have a variety of approaches to workforce training and funding, but workforces often cross state lines, especially in areas like New England where states are small. Pursuing similar program offerings and certification requirements on a regional level can make it easier for businesses to work across state lines. It also allows for similarly situated states to work together and learn from one another, leveraging resources and lessons learned in the process.
States can take advantage of a regional approach to learn from one another on how to engage with contractors and remove barriers to the workforce, as well as establishing a regional set of standards for training, equipment selection, and sizing that will allow for less confusion in the market. NEEP has set the standard for cold climate heat pumps and is rolling out training and sizing tools for contractors that can be used throughout the region, including an online Contractor Certification for Whole Home Energy Retrofits, the Cold Climate Air Source Heat Pump (ccASHP) Specification and Product List, and a heat pump sizing tool.
Taking these steps can ensure contractors in the region have access to training, have the right tools to size and install equipment, and put reliable, tested cold climate heat pumps in homes.
2. Implementing Equity Focused Programs and Sharing Best Practices
Implementation of federal funding also comes with opportunities to instill new practices in program design and deployment that seek to center equity in alignment with Justice40 and state level equity initiatives. Now is the time for programs to take proactive steps to understand the disparities of the past and make changes to promote equitable processes and outcomes in the future.
Regional coordination and sharing of practices on equity initiatives can help states incorporate new policies and programs, as it can act as a way to share innovative programs and lessons learned. NEEP has also created tools that states can use to center equity within their programs. Last year, NEEP released an equity-focused framework for energy efficiency programs that provides different steps for program implementers and state energy offices to embed equity in energy efficiency programs. It includes steps such as creating a process for meaningful stakeholder engagement, conducting a gap analysis to inform program design and implementation, setting aside certain funds to ensure equitable outcomes, and tracking metrics, and goals. Creating a regional equity-focused working group can help states identify and implement new policies and ensure these programs achieve the mandates of Jusitce40 on the federal level.
3. Designing Standards and Practices for Identifying and Gathering Utility and Program Implementation Data
Data will be a key part in in the implementation of IRA and BIL funding at the utility and state level. Utility-level data can help identify customer needs and implement measured and active demand response programs, which look to provide savings in real time. Yet access to this data has long been a barrier to implementing data-focused programs. Coming up with regional standards and requirements can streamline access to this data and ensure that utilities and companies that work across borders know how and what data is available throughout our region.
Meanwhile, a statewide data tracking platform can help state energy offices implement IRA rebate programs and track other state energy and climate goals. Such a platform could coordinate eligible houses, completed improvements, location of deferrals, and other data points that can show adoption of IRA and other building and thermal decarbonization programs. Coordination on a regional standard platform, with streamlined and standard practices and procedures to gather data can help not only state energy offices but also contractors and implementers.
4. Implementing Programs that Supplement Existing Energy Efficient Efforts
Braiding, stacking, and supplementing are all buzzwords used to describe how to best use federal funding to complement, fill-in-gaps, and grow existing state, utility, and community efforts. The fact is, implementing programs that work together will require a lot of coordination from different parties – various state agencies, private businesses, non-profits, and community-based organizations - and it will have to happen quickly.
A regional working group can help these stakeholders identify ways to coordinate the funding and identify programs to replicate from similarly situated states. For example, many states in the Northeast and Mid-Atlantic have nation-leading utility-led energy efficiency programs. A regional working group can identify best practices for states who want to align programs with utilities, sharing both successes and pitfalls from states that have already created similar programs. For programs that want to look to a third party or other existing networks, this group can help coordinate different paths and best practices for that as well.
5. Designing Innovative Building Decarbonization Programs
States can start looking to pivot energy efficiency programs to focus not only on energy savings but also on emissions reductions and energy optimization. Federal funding can enable innovation in energy efficiency programs by providing funding for initiatives that may have been out of reach before, such as fuel switching, whole home programs, active demand, time-of-use rates, and leveraging data to identify and prioritize customers. These policies are complicated and sometimes difficult to implement, so coordinating across states or in the same region can help each state learn from each other and replicate successful endeavors.
Additionally, this group can lean on technical expertise and guidance from NEEP and its allies to understand how these policies have been implemented and identify best practices that can be replicated and scaled. NEEP has already begun to look at how to use this funding for measured programs, expanding access to retrofits, and implementing grid-interactive or virtual power plants programs.
As states and communities prepare to receive this once-in-a-lifetime funding, it is important to consider how, as a region, we can utilize it to achieve energy, climate, and equity goals. NEEP looks forward to working with states, communities, and other stakeholders in our region to grow existing programs and create space for new priorities and initiatives that support those energy, climate, and equity goals.